Is your revenue per attorney at least $500,000 for 2011?
I’m just beginning the annual review of Academy financials in preparation for our big Spring Summit closed-door meeting. All Members who submit their financials have a closed door meeting and look at all the other estate planning law firm financials and have a valuable discussion. About 5 law firm owners are on a panel and specifically discuss their numbers from last year.
One easy benchmark to look at on your own financials is the Revenue per Attorney number. You need to total your number of attorneys in the law firm. If you have 3, plus a 20 hour / week attorney, plus 1 owner – your total is 4.5 attorneys. If that is the case, you have enough attorneys in your firm to expect to be able to handle around $2,250,000 to $3,750,000 in gross revenue.
That doesn’t mean that each attorney must go generate $500,000-$750,000 in revenue. Some attorneys are rain makers, some are more drafters of documents and behind the scenes talent. We’re just addressing the average revenue per attorney that seems to make the most sense.
If the number is LOWER than $500,000 per attorney, the factors to look at usually center around:
- Are the attorneys actually busy?
- If they are, how much of their work or time spent is non-attorney work?
- Are there enough staff people on the payroll to pick up all the non-attorney work the attorneys are doing?
- Is the revenue too low to really generate $500K per attorney?
- Is the marketing off? Or is the attorney effectiveness in consultations off?
Are you able to quickly come to some conclusions about how healthy this benchmark is in your firm?
Jennifer Price
Director, Member Services
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
www.aaepa.com
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